IFC, a member of the World Bank Group, is providing $66m, and mobilizing an additional $172m, in a transaction to support largest wind power farm project in Pakistan.
The financing to Triconboston Consulting Corporation will help construct and operate three new 50-megawatt wind farms in Sindh province. Triconboston is majority owned by the Sapphire Group, a leading Pakistani industrial group, with significant interests in textile and power.
The project is part of IFC’s broader efforts to foster private participation in Pakistan’s power sector to increase investments, help diversify energy sources, cut the cost of electricity, and reduce the use of polluting and expensive fossil fuels. Pakistan suffers from frequent power cuts that hamper social and economic development, and cost the country an estimated 2 percent of gross domestic product every year.
“The new wind farm will generate reliable, clean energy at lower prices and help reduce pressure on the country’s power grid, while mitigating climate change,” said Nadeem Abdullah, Triconboston CEO.
“It is testament to Sapphire’s ambition to become a leading renewable power developer in Pakistan, after having already successfully commissioned our first 52.8-megawatt wind farm in 2015.”
This is the first time in Pakistan that a portfolio of three separate plants will be internationally financed by a single consortium, bringing further innovation to Pakistan’s project finance market. Other financiers include the Asian Development Bank, the Islamic Development Bank, and DEG – Deutsche Investitions-und Entwicklungsgesellschaft.
The plant is expected to be fully commissioned by the end of 2018 and will make its greatest contributions during the high-demand summer months, providing clean power to about 600,000 residential customers.
“IFC has been at the forefront of investing and mobilizing financing to support private sector participation in Pakistan’s power sector,” said Mouayed Makhlouf, IFC’s director for the Middle East and North Africa region.
“This is our fifth investment in wind power in the last three years in Pakistan. The project will also support Sapphire in their diversification strategy in renewables.”
The development of wind power contributes to the diversification of Pakistan’s energy generation mix by increasing capacity with shorter lead times and also helping to reduce electricity prices.
The work is part of the World Bank Group’s Pakistan Transformational Energy Initiative and Joint Implementation Plan, which aims to mobilize $10 billion in new generation investments to address the country’s acute power shortage and improve sector sustainability.
Pakistan represents IFC’s second-largest engagement in the Middle East and North Africa region, with over $5.6 billion in cumulative investments committed to date.